Term Paper: Forgotten Continent: The Battle for Latin America

Latin American used to be considered a non-entity in terms of economic opportunity. When some one said, "Latin America" it typically conjured up images of primitive tribes, jungles, and ancient long lost ruins. It was not associated with a land of opportunity for investment and venture capital. However, Latin America continues to improve its image and is in the process of integrating into the global economy. Latin America is becoming a player in the world economy. Michael Reid's book, "Forgotten Continent: The Battle for Latin America's Soul" examines Latin America in a new light. This book examines Latin America and its deepened democratic institutions as a world of opportunity and social advancement.

Social inequalities and authoritarian dictatorships, once endemic to Latin America, are not being replaced by new social orders. Social change in Latin America has provided the means to improve infrastructure and increase economic opportunities. However, U.S. policy on Latin America has always treated it as the unruly stepchild. The U.S. would rather focus efforts in other, more profitable areas of the globe, such as Russia and the Middle East. Latin America hardly got a mention in Washington strategy discussions.

The media also played a role in minimizing the place that Latin American and the changes that are taking place have in the minds of Washington bureaucrats and the American public. Unless the news was particularly earth-shattering, the press hardly wasted the ink. When they did publish a story on Latin America, it was usually in a negative context. Latin America became associated with drugs, street gangs, violence and illegal immigration. However, lately Latin America has been working to change that image, but the American press has hardly taken notice.

Reid's Key Arguments

Reid argues that Latin America should matter to Americans, even if the mass media refuses to follow suit. Latin Americans have now surpassed black Americans and now represent America's largest ethnic group. Latin America has become a smoldering pot for new and old ideas. One can find emerging democracies, socialist, communist, free market, and other forms of society living side by side. Sometimes, fences make good neighbors in Latin America. Conflict between competing ideas has been a leading factor in the ability of Latin American to present a unified front to the rest of the world.

The emergence of Latin America has not been without labor pains. A shift toward ideas favored by the United States has led to stagnation and economic meltdown. In the face of economic crises, many countries replaced forward-thinking U.S. friendly leaders with someone that resembled the old way of thinking. This led to the denouncement of development ideas from the U.S. It was thought that what worked for the U.S. would not work for other countries. Therefore, any new ideas about development from the U.S. would be automatically rejected.

There are two sides to the Latin American story. One side tells the story of failed attempts at change, leading to economic disaster and despair. The other side is a story of developing democratic institutions and integration into the global economy. This side also tells the story of recognizing social inequalities and the foundations of reform designed to eliminating them in the future. Progress has been slow and steady, not the juicy stuff to spark media attention. However, slow revolutionary changes have been present and are gaining ground, despite their lack of attention by the U.S. press. This is exactly what Michael Reid was trying to address in his book. He highlighted the slow revolution that is embracing Latin America and the impact that it is likely to have on the balance of power in the global economy in the future.

Reid agrees that there have been some major problems and mistakes made on the way to reform, but that despite these challenges, a new world order is emerging in Latin America. Reid feels that many Latin American countries are in much better economic shape than they were at the beginning of the new millennium. A spike in oil prices since 2001 has helped many countries, such as Venezuela to become major players in the supply of natural resources. However, Chavez's attempted revolution were counterproductive to this goal. Reid supplied amply evidence that this plan was not sustainable for Venezuela's economy or for their natural resources.

Reid did not focus on Chavez and the problems highlighted by the mass media. Instead, he focused on countries such as Brazil and Mexico, whose reforms were much more likely to be sustainable in the future. Reid was more interested in long-term permanent change, rather than short-term antics that were not likely to result in stability of new ideas. Reid's purpose can be considered oppositional to that of the mass media. Reid's purpose was to examine changes in an academic manner. The media only tends to focus on sensationalism that will sell more newspapers.

Evolution Rather Than Revolution

While the mass media focused on headline grabbing revolution, focusing on long-term evolution into strong democratic governmental systems with a supported economy. Reid supports the development of economic evolution by providing examples of sound macroeconomic policy in many of the region's countries. He explains the debt crisis of the 1980s by the failure of political leaders to curb spending immediately after the oil price shocks of the 1970s. When central banks monetized fiscal deficits, it brought on a cycle of inflation, currency crises, economic contraction, and movement of capital out of the country. Reid's explanation of this historical period is largely theoretical and highly opinionated, but it does appear to be a plausible explanation for the events.

Countries that do not have sufficient energy resources currently fact rising import expenditures, which could lead to further economic turmoil for them. Resource exporting countries, such as Venezuela have sharpened their economic policy to allow them to stash excess funds for a rainy day. Reid downplays the importance of Venezuela in creating economic stability in the region, largely because his focus is elsewhere. He does not ignore the stability created by Venezuela, but feels that it has already received a disproportionate amount of media attention. However, more attention towards Venezuela would strengthen his arguments about long-term stability on a regional basis.

According to Reid, the emergence of formal democracies in the 1980s has resulted in the inclusion of groups that have long been left out of the political process. For instance, indigenous populations in Bolivia and Peru are now able to vote and now have their own elected officials. This is a major step forward on the road to stability in the region. This is a change from voting practices in the past that excluded certain ethnic groups and were wrought with fraud. Reid uses voting reform in Mexico as a prime example. Latin American countries have been working hard to reverse their shady reputations of the past. This is a major step on the road to entrance into the global marketplace.

Reid claims that decentralization in Columbia, Brazil and other countries has brought democracy closer to the people. This has allowed Columbia to decrease murder rates and take crime off the street in many places. It is not perfect, but as Reid point out, it is getting better. Voters in Brazil now use the election system to punish leaders that use public funds to pad their own pockets instead of using it to boost employment. Long suppressed, Brazilians are now learning that they have the power to coerce their leadership into bending to the will of the public. They have taken power back for themselves. These fledgling democracies are beginning to take their power and place in the world. Reid feels that U.S. support for these democracies has played a major role in the development of these democracies, but once again, this appears to be only Reid's opinion.

Focus on Social Change

Reid points out that the most dramatic changes in Latin America have come in the form of social change. The historical roots of social stratification in Latin America lie in colonialism and slavery. This overlapped existing ethnic divisions, creating a unique local class structure. This is particularly true in Andean countries, such as Bolivia, Ecuador, and Venezuela. Reid highlight the underlying social changes and provides several plausible explanations for them.

Reid uses the example of the development of social programs and changes to improve the educational system as the primary reason for these developments. In once case, Reid found that in 15 years, the percentage of Latin American households with electricity has risen from 83 to 90%. He demonstrates that the rates of attendance at primary school systems have shown similar increases. Reid assigns causality to these factors, but in reality, it is not known the relationship between these two elements is causal or merely a coincidence.

Generalizations and drawing causal inferences from historical data are one of the key arguments against the plausibility of Reid's causes of social change. These two factors may be connected, as Reid suggested, but…
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